Vivendi sets out its defense as it fights Elliott over Telecom Italia

FILE PHOTO: Telecom Italia tower is seen at the headquarter in Rozzano neighbourhood of Milan, Italy, May 25, 2016. REUTERS/Stefano Rellandini/File Photo

In a document released online on Tuesday, media group Vivendi - which is the top TIM shareholder - said it provided “stability and expertise” to the Italian phone company, in contrast with the “quick fixes” that Elliott would bring.

Elliott did not immediately reply to calls seeking comments.

TIM has lost a quarter of its market value since Vivendi first took a stake in mid-2015.

Vivendi has since increasingly tightened its grip on Italy’s biggest telecoms group, raising concerns in Rome over an asset Italy considers as being of strategic importance.

The fall of TIM’s shares, and the mounting criticism about Vivendi’s strategy and control over the company, brought Telecom Italia to the attention of Elliott in March.

The activist fund has since then built up a 9 percent stake and is asking for changes at the board at a shareholders vote on April 24. However, Elliott said it wanted the chief executive supported by Vivendi, Amos Genish.

“Vivendi can provide stability and expertise while enabling other shareholders to invest and participate in any future upside,” the French group said in the document.

“We are also committed to preserve Telecom Italia as an Italian company with Italian governance and representation,” it added.

“ITALY’S UNIQUENESS”

Vivendi’s defense of its stake in TIM came a day after Italian Industry Minister Carlo Calenda had described the French company as being an “awful” investor in TIM.

Vivendi, led by billionaire Vincent Bollore, insisted that its 24 percent stake in TIM represented a 4 billion-euro ($4.95 billion) investment and that it had a vested interest in the success of the phone operator.

It also stressed that Elliott was backing the 2018-2020 strategic plan laid out by Genish for TIM and that it did not see the how a divided board could help run the company.

The appointment by Vivendi of two thirds of TIM’s board last year, including its CEO Arnaud de Puyfontaine as chairman, unnerved many Italian politicians at the time.

“Perhaps Vivendi in the past underestimated some of Italy’s uniqueness,” the group said in the document, adding that it recognized the “important stake” of Italian authorities in ensuring that the phone company is well run.